Obtaining cryptocurrency is one thing, but safely storing it necessitates an entirely new set of skills and understanding. This guide will show you the best ways to store cryptocurrency: how to safeguard your assets, select the best wallet, and avoid the most prevalent crypto security risks.
What Are Crypto Wallets?
A crypto wallet is a piece of software that keeps track of your public and private keys and allows you to transact digital currencies. It will keep track of your balance and connect with different blockchains.
To handle and secure your cryptocurrency holdings, you’ll need a cryptocurrency wallet.
Is There a Safe Place to Store Bitcoin?
For secure Bitcoin storing, the Bitcoin organization recommends holding money in two different wallets.
1. Hot spending wallet
You should use such wallets to hold small to medium quantities of Bitcoin for spending and walking around. The wallet is usually kept digitally on a smartphone.
2. Cold Savings Wallet
A cold savings wallet should retain most of a user’s Bitcoin, which you will use to replenish the hot wallet on occasion. The cold wallet should be kept offline, preferably at home, in a fireproof safe.
Types of Wallets
Bitcoin can be stored in various wallets. To retrieve your money, you will need a set of private keys, regardless of whatever wallet you use.
It is difficult for you to access your Bitcoin or other digital currencies if these keys are lost or stolen, whether you keep them physically or online.
From physical goods being misplaced to digital gadgets malfunctioning and being hacked, storing your Bitcoin necessitates careful consideration.
The following are types of wallets available to you to store cryptocurrencies.
- Digital Wallets
- Hardware Wallets
- Paper Wallets
The mobile wallets can be software or hardware (web-based), and you can use them on a computer, smartphone, or even paper.
Similarly, you should keep only a small quantity of Bitcoin in the digital wallet for expenditure. In contrast, most Bitcoin should be kept in cold storage, which is a lot safer generally.
The digital wallet should, of course, be secured so that no one can access your encryption information and private keys.
One of the advantages of digital wallets is that they are convenient to use and can be accessed everywhere in the universe.
With this, it makes them a suitable option for carrying cash when vacationing or touring. In contrast, digital wallets, like any other digital service or product, are subject to hacking.
Hardware wallets, such as an external storage disk or a USB drive, take cryptocurrencies like Bitcoin and store them on physical devices.
Hardware wallets provide entirely anonymous transactions and do not store any of the user’s personal information. They are not susceptible to malware and provide a more secure place for storing cryptocurrencies.
The benefits of a hardware wallet are that it avoids digital wallets’ problems, but the negatives arise from the reality that hardware wallets aren’t electronic. You would lose the money in your hardware wallet forever if you lose the wallet or private keys.
Although a paper wallet may appear to be the most common method of Bitcoin storage, these methods necessitate a deeper understanding of cryptocurrencies and Bitcoin to function.
You may generate paper wallets for Bitcoin using services like Bitcoin Paper Wallet or Wallet Generator, but you should first grasp the upsides and downsides.
Paper wallets, like hardware wallets, provide some privacy to the user. Bitcoin paper wallets employ a seed phrase to transmit funds in a relatively tiny amount of space.
Aside from issues like printer network security, paper wallets have the same drawbacks as hardware wallets. According to a verified report, you may not use it if it is misplaced, destroyed, or the ink disappears.
Another drawback is address re-use; if you don’t use the same address for each transaction, you’ll have to establish a new paper wallet.
Best Ways To Store Your Crypto In Wallets
Storing and maintaining your cryptocurrency can be extremely complicated, with private or security keys, recovery phrases, and no method to raise complaints.
It becomes more challenging to realize how valuable your crypto becomes over time and that transactions are unchangeable.
There are a few practical strategies you can do to secure your cryptocurrencies once you’ve chosen your wallet.
i. Install Genuine Antivirus Software
You should install antivirus software on any Bitcoin-enabled device to identify and remove viruses and malware. Viruses will not be able to steal your virtual currencies whether the wallet is linked to the internet or not.
ii. Backup Your Wallet
As soon as possible, as often as feasible, back up your whole wallet, including any undisclosed secret information and security keys.
If your devices fail, this may be your only option for getting your money back.
It is a good idea to back up your wallet on multiple media, such as CDs, USB sticks, and hard disks; duplication is essential.
Your backup should, of course, be protected. While wallets will eventually only need to be backed up once, users must back up their wallets frequently for the time being.
iii. Make Use Of A Secure Password
You should use passwords to protect your Bitcoin or other virtual coins wherever possible. The password must be at least 16 characters long and comprise a set of numbers, letters, and punctuation marks that is distinct.
To ascertain if your password is secure, use a safe password checker. You can also use a password manager to help you build strong passwords. Make sure your Bitcoin password isn’t shared with anyone else online.
iv. Keep Your Password Safe
If you lose your password, you’ll have little or no options for recovering your cryptocurrency, so keep a written duplicate in a locker or another secure location.
Memorize your password or protect it in an encrypted password manager in case it is stolen or lost.
v. Always Update Your Software
Software updates should be installed regularly, as soon as they become available. Hackers may find it easy to target out-of-date software.
vi. Always Turn On Two-factor Authentication
Two-factor authentication, often known as 2FA, requires you to input a passcode delivered to another device to access your Bitcoin account or crypto wallet. Turn on 2FA when it’s accessible.
vii. Use A Different Email Address
Use a separate email address for your Bitcoin account and correspondence if you want maximum anonymity.
However, it shouldn’t be linked to your social network profiles or other payment accounts if you want absolute privacy.
viii. Use A Multi-signature System
Another alternative is to demand three to five people’s permission before allowing completed transactions.
This ensures that transactions cannot be carried out by a single server or controller, considerably lowering the danger of theft.
ix. Use A Safe Network
It is preferable to use a secure and private network rather than a public Wi-Fi network while accessing your Bitcoin via the internet.
If you must use a public network, you can access a hotspot or use a VPN to encrypt your internet activity and hide your IP address.
Use antivirus software with built-in network security for your home network.
x. Avoid Scams
Many Bitcoin scam phishing emails have been reported by various publications, with many of them promising Bitcoin giveaways and airdrops.
Be wary of these phishing scams and avoid clicking on unexpected emails, links, or files, particularly Twitter and other social media platforms. If anything related to crypto appears to be too good to be true, it most likely is.
Which Crypto Wallet Is Best To Use?
A mix of hot wallets for quick trading or purchases and cold wallets to secure most of their virtual currencies holdings is recommended for traders with many cryptocurrency assets.
The leading crypto, Bitcoin, on the other hand, is known for its extreme volatility. A good rule of thumb is never to trade or own more than you can afford to lose.
It uses its own operating system and supports a ton of third party integrations and over 1000 coins and all ERC20 tokens.
If you’d rather work with a software wallet, it has an application – Ledger Live – that you can install on your phone or computer to store and manage your crypto.
2. BitBox02 Wallet
You may store your private crypto key and manage any assets offline with Shift Crypto’s BitBox02 hardware wallet powered by an external chip.
The BitBox02 wallet’s first edition supports Bitcoin, Ethereum, Litecoin, and over 1,500 additional altcoins. Furthermore, Shift Crypto also offers a Bitcoin-only version. If you only want to store Bitcoin, this version might be ideal for you.
3. Wasabi Wallet
Wasabi is a free hot wallet for Mac, Windows, and Linux desktop platforms that provides open-source, non-custodial storage for Bitcoin investors.
This will help prevent third parties or hackers from tracing where each coin originated or was created.
However, this function does not risk the security of your currencies. You and the other users will be unable to determine where each currency originated.
Wasabi claims that this removes the possibility of funds being stolen. Unlike ordinary transactions, where just one sender and one receiver, outside parties find tracking more difficult.
Wasabi is compatible with various desktop systems. However, it is not available on iOS or Android phones.
There is no single ideal option for everyone. Determining the best Bitcoin storage solution requires recognizing the many possibilities and making the best decision for your spending and saving patterns.
Now that you know how Bitcoin storage works, you can more accurately compare the features offered by several wallets and choose the one that best suits your needs.
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